Alberta Premier Rachel Notley says residents of Fort McMurray will not be returning home for some time as fires continue to burn within the city for a third day, the flames now covering an area of 850 square kilometres, about the size of Calgary.

The wildfire in Fort McMurray could be the costliest disaster in Canadian history as estimates for insured damages run as high as $9-billion. Thousands of homes and businesses in Alberta's fifth largest population centre have been destroyed.

Fire officials expect the inferno to continue growing for days as strong winds push flames into the dry forests surrounding the capital of Canada's oil sands. On Thursday, the wildfires began began moving south, threatening the evacuation shelters where many local residents had been waiting to return home.

The province also began an airlift of the nearly 25,000 residents who are still trapped north of the city.

Officials chose to use military and civilian transport planes to move the residents to Edmonton and Calgary after ruling out a plan to run a convoy of the evacuees through Fort McMurray because of fire and smoke. Highway 63, which runs through Fort McMurray, is the only way out.

Ms. Notley did not provide a timeline for residents to go back, but said it would be measured in weeks or months, not days.

"I must be very, very direct about this: It is apparent that the damage to the community of Fort McMurray is extensive and the city is not safe for residents," she said.

Once the fires are doused, officials will need some time to inspect the city's infrastructure, she said.

As of Thursday, Fort McMurray's town hall, hospital and airport have escaped serious damage but 1,600 buildings have been ravaged.

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BMO analysts estimated insured damages could run as high as $9-billion.

"Our province is facing one of the most significant challenges in its history. Every available resource in Alberta has been deployed to combat the wildfire," Ms. Notley said.

While cooler temperatures slowed the advance of the fires on Thursday, communities south of Fort McMurray are facing extreme risk, fire officials said Thursday. As a result, most of Fort McMurray's 80,000 residents are now being sent further south toward Edmonton.

Emergency officials say they'll try another convoy at first light on Friday. They need to get the people out of the work camps where many are staying.

"We have a very difficult road ahead, with a lot of uncertainty as these fires continue to burn," Ms. Notley said. "Whatever road we face, we will face them together."

After days of gridlock on the region's roads as residents fled the flames, Highway 881 into Fort McMurray was largely deserted on Thursday.

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The secondary road south of the city had seen a constant stream of vehicles loaded with residents and their possessions in the two days after a mandatory evacuation had been ordered.

On Thursday, the road was empty except for emergency vehicles and helicopters buzzing ahead. Long lines at the few gas stations disappeared. As residents fled south, they left behind a burnt-out ghost town.

No fatalities, serious injuries or missing persons have been reported related to the fire. However, two people were killed in a crash in the Lac La Biche area on Wednesday.

Hundreds of evacuees ended up at Lac La Biche's Bold Center. The parking lot was packed and more than a dozen blue and white buses were parked in the back on Thursday. Hundreds of cots in the centre that had been empty earlier this week were also full. The crush began earlier that morning, after the Fort McMurray fire turned south.

Alberta's health service has provided nurses and mental health help on site. Insurance outfits have set up stations for evacuees to start the paperwork. Tables are covered in clothes, toiletries, baby food, formula and other donated goods. Diapers and water sit on the floor. Showers and food are available, including halal meals.

Alberta is now looking to provide transitional housing for the tens of thousands of Fort McMurray residents who have lost their homes.

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It could be weeks before they are allowed to return and many might not have a home waiting for them.

Kelsea Frye and her parents are among the evacuees who could not get out of Fort McMurray easily as the flames approached. Ms. Frye, a 22-year-old clerk at a yoga studio in downtown Fort McMurray, went to her home in the city's Thickwood neighbourhood Tuesday. Police were in the streets, using bullhorns to tell people to leave immediately. She headed north about 50 kilometres to Fort Mackay.

"My parents had the boats on a trailer, so we slept in those," she said. They couldn't head south Wednesday because of poor visibility caused by the smoke, and they couldn't go farther north because another fire was in the way. The southern route eventually cleared – it has since been blocked again by flames.

Now, her parents may be part of the outward migration caused by the fires. They are packing, deciding whether to return to Fort McMurray – their home for 35 years – or return to Newfoundland and Labrador, where they grew up.

"This morning my parents said we either stay here a couple weeks and wait for the world to turn around, or we go to Newfoundland," Ms. Frye said, sitting on the grass with her boyfriend Nathan Best outside the Lac La Biche evacuation centre.

"They haven't completely decided."

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She suspects they will head east, where they have a house, and retire early.

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